Lawmakers seek to stall Xcel plan to shutter inefficient Cameo Station plant

Lawmakers have introduced legislation to try to stop Xcel Energy from closing its outdated Cameo Station power plant, a coal-solar plant that Xcel says is too costly and impractical to maintain. Debate over the law sees politicians flipping ideology on its side. Grand Junction-area Republicans looking to preserve jobs in coal country are attempting to use government to force Xcel to make management decisions in direct opposition to market demands. Xcel says it’s just bad business to keep the plant open.

House Bill 1282 (pdf), sponsored by Grand Junction-area Republican Reps. Steve King and Laura Bradford, would keep the aging Cameo Station power plant open until July 2012 when the proposed Red Cliff Mine can come online in the Book Cliffs area northwest of Grand Junction.

“The closure of coal-solar power plants at this time will destroy jobs and reduce energy generation at a time when both Colorado and America need more of both,” reads HB 1282, which is scheduled for full House debate Wednesday. “Therefore, it is declared to be in the public interest to require such facilities to remain operational in the near future.”

Tapping into a coal seam adjacent to the McClane Canyon Mine, which supplies most of the coal to Cameo, Red Cliff’s opening would preserve about 100 McClane mining and trucking jobs that will go away with Xcel Energy’s scheduled closing of Cameo in December.

The House Committee on Transportation & Energy approved the bill on a 7 to 4 vote last week, but an Xcel Energy spokesman said there are several reasons to shutter Cameo, an inefficient 50-year-old facility east of Grand Junction.

“While we certainly respect the opinion of one of the committees in the legislature, there are a number of reasons why we can’t keep the plant open,” said Xcel’s Tom Henley. “The first reason is there’s a lack of load and resource need for Cameo after 2010 – essentially a lack of demand. The cost of staffing and maintaining the plant operations there when the capacity is in excess of the system need is really not cost-effective and not in the best interest of the customers.”

Targeting the “new energy economy”

Bradford since last summer has been trying to get Gov. Bill Ritter’s administration and U.S. Rep. John Salazar to exert pressure on Xcel to keep Cameo open until Red Cliff starts production. Xcel has been using Cameo as a test facility for integrating solar energy with a coal-fired plant.

Bradford and King blame Democrats and Ritter’s “New Energy Economy” emphasis on renewable energy and environmental regulations for a drop-off in traditional energy production jobs on the state’s Western Slope.

“This is a step in the right direction and for the first time this session, the 67th General Assembly would actually be saving jobs in Colorado,” King wrote last week on his Facebook page when 1282 made it out of committee.

Conservationists counter Ritter’s approach has created thousands of clean-energy jobs and makes sense from a long-term environmental perspective.

“We need to shut old, coal-fired power plants as soon as practicable,” said Pete Maysmith, executive director of Colorado Conservation Voters. “Between the negative health impacts and the damage coal through CO2 emissions causes to our climate, it doesn’t make any sense to hold off on shutting down something like a coal plant that has outlived its useful lifespan.”

Xcel’s Henley acknowledges one of the reasons for shuttering Cameo is its lack of efficiency and Ritter’s executive order mandating carbon reductions to 2005 levels, but he also said there is no budget to maintain the plant in 2011 and no staff to man it.

“With the staffing requirements out there, Cameo Station staff is already prepared for the 2010 retirement,” Henley said. “We’ve got people who are already set to retire themselves, move on to other plants or do something else entirely. So trying to run a plant without employees is really difficult.”

Cat fight in coal country

The reality is the Red Canyon Mine likely would have been open by the time Cameo closed but for a turf war between coal companies. Both McClane Canyon and the proposed Red Cliff Mine are on leased U.S. Bureau of Land Management (BLM) stretches near the proposed Hunter Canyon wilderness area.

BLM officials last year required a revised Draft Environmental Impact Statement (DEIS) – not because of concerns voiced by environmentalists about infrastructure impacts – but because of comments filed by a competing coal company looking to expand its own operations in the area.

According to comments obtained by the Colorado Independent, Arch Coal, which also operates the West Elk Mine along the North Fork of the Gunnison River, has “a substantial and genuine competitive interest in the coal reserves and mine development facilities subject of the Red Cliff Mine Project.”

The company asked the BLM to expand the scope of its DEIS in order to consider access alternatives and a broader area including its own exploratory interests near the Book Cliffs. That request prompted the BLM to revise its DEIS for competitive reasons, leading to delays for McClane’s Red Cliff Mine proposal.

In a pointed response, CAM Colorado – a subsidiary of Rhino Energy and operators of the McClane Canyon Mine – essentially accused Arch Coal of piggybacking on their own considerable time and expense in applying for federal environmental permits.

“The fact that Arch Coal holds an exploration license in the area is simply irrelevant,” the CAM Colorado response reads, maintaining Red Cliff’s compliance with the National Environmental Policy Act (NEPA) should have been considered on its own merits.

According to the BLM, CAM also changed environmental contractors in midstream, and the BLM’s project manager on the Red Cliff file recently retired. Additionally, Arch Coal’s comment was one of several the federal agency received that prompted the DEIS revision, which is just now getting under way.

So the delays in opening the Red Cliff Mine and maintaining those 100 jobs endangered by the scheduled closure of the McClane Canyon Mine have nothing to do with the Ritter administration and the “New Energy Economy,” observers say. BLM officials said the revised DEIS for Red Cliff won’t be done until the end of the year at the earliest.

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